Niles mayor: ‘Drastic cuts’ coming as revenue falls

By Jordan Cohen | November 16, 2016 at 12:06a.m.

NILES

After learning that income-tax revenue for the remainder of this year is well below expectations, Mayor Thomas Scarnecchia warned that major cutbacks are likely in 2017.

“We’re going to make drastic cuts. ... I know this,” the mayor told council, all of whom showed up for Tuesday’s finance committee meeting.

Niles has been in fiscal emergency for more than two years, and based upon information disclosed at the meeting, its situation could not be more bleak.

Treasurer Janet Rizer-Jones said income-tax revenue will yield only $7 million this year, well below the $7.19 million that had been projected.

Scarnecchia admitted he does not know if layoffs, services or both will be among the cuts. Council President Robert Marino was unhappy with the timing of the mayor’s statement.

“It’s very dangerous to throw comments out like that,” Marino chastised the mayor. “We don’t want to cause firestorms from putting out bits and pieces of information, [which is] why we need a comprehensive plan.”

“I didn’t know [revenue] was underperforming until now,” Scarnecchia replied. The mayor has been ordered to submit an amended recovery plan to council for approval by Dec. 2 before it is reviewed by the fiscal commission that oversees city spending later next month.

The financial-recovery plan is supposed to project positive balances for five years.

City Auditor Giovanni Merlo said with lower revenue and the city’s other spending obligations, including repairs to the 89-year old city hall, “we could be looking at a negative [balance] of $148,000 at the start of next year.”

The auditor earlier had projected a modest carryover of $26,000 in the general fund, but that was before the latest tax-revenue statistics were available.

One of the major drains on the budget is overtime. State-appointed Fiscal Supervisor Tim Lintner said overtime spending has increased in the light department from $92,000 to $175,000, and is up “110 percent” in the water department.

When Safety Services Director James DePasquale claimed he was ordered “by the state” to stop all overtime, Lintner took exception.

“We never said overtime had to stop,” the supervisor responded. “We wanted to know why it was doubling.”

City employees called out on overtime are paid for four hours. DePasquale told council he assigns additional work to ensure they are working the entire time.

Other costly expenditures are merchant-services fees charged to the city through Huntington Bank for credit-card payment of utility bills. The city has had to pay nearly $54,000 in the past three months and is on pace to pay $177,000 total this year.

“I haven’t seen [fees] like this,” Lintner said. Rizer-Jones said she continues to look for another credit-card vendor.

The city will face even more revenue cuts when residents lose their jobs at General Motors Lordstown with elimination of the third shift and its 1,245 workers in January. The treasurer did not have a count of the number of the Niles residents affected.